DSV goes Euro

In the autumn of 2017, the global transport and logistics company DSV issued a corporate bond of EUR 200,000,000. Prior to this, the company already had three corporate bond issues in DKK, and the shift to EUR gave access to new international investors. The stock exchange and CSD used remained the same.

The most recent corporate bond from DSV is an issuance of EUR 200,000,000 in senior unsecured notes, with maturity in 2024, at a coupon of 1.75%. The bond is traded on Nasdaq Copenhagen, the CSD is VP SECURITIES and the advisers were Danske Bank, ING Bank, Nordea Bank and Nykredit Bank. The shift from DKK to EUR was motivated by the intention to reach a broader audience in terms of investors, according to Flemming Ole Nielsen, Investor Relations Director at DSV:

“We were successful in reaching institutional and also more international investors, of which some are unable to invest in DKK, even though the krone is closely pegged to the euro. We could do this using all of our current vendor relations, including Nasdaq Copenhagen and VP. Both of these are internationally well-reputed and our advisers saw no downside from re-using our established local set-up, and they were proved right,” he says.

Strategy for capital structure

After an acquisition in 2016, DSV became the fourth-largest global freight forwarding company and a key player in the international transport and logistics industry. DSV’s operations are separated into three divisions: Road, Air & Sea and Solutions. With offices and facilities in more than 80 countries on six continents, DSV provides and runs supply chain solutions for thousands of companies on a daily basis. After initially financing the acquisition via bank loans, DSV decided to tap the corporate bond market for long-term financing and to optimise the diversification of funding sources. Corporate bonds are an integrated element in the capital structure of DSV.

“Currently, we have debt of around DKK 7 billion, and we are aiming for a fifty-fifty split between bank loans and bonds. These diversified sources give us a comfortable level of manoeuvrability and an average duration of approximately four years,” says Flemming Ole Nielsen. DSV is within its target for financial gearing, which is for net interest bearing debt to stay within a factor of 1 to 1.5 of EBITDA.

Staying with VP SECURITIES and Nasdaq

Taking the step from DKK to EUR entailed some changes in documentation, while DSV maintained its partner set-up. The process was basically identical, including the legal process and approval from the financial authorities.

Taking the step from DKK to EUR entailed some changes in documentation, while DSV maintained its partner set-up. The process was basically identical, including the legal process and approval from the financial authorities.

“We could have changed CSD or stock exchange, but we saw no reason to do this. The new currency did not require any changes, and by staying with VP SECURITIES and Nasdaq Copenhagen we achieve a high level of service, advisory services and personal relationship,” concludes DSV’s Investor Relations Director.

“The new currency did not require any changes, and by staying with VP SECURITIES and Nasdaq Copenhagen we achieve a high level of service, advisory services and personal relationship,” says Flemming Ole Nielsen, Investor Relations Director at DSV.

The fourth largest global freight forwarding company in the world – DSV – recently issued a corporate bond of EUR 200,000,000 and re-used its existing relationships with Nasdaq Copenhagen and VP SECURITIES.